Institution-Management Approach to State Owned Enterprise Reforms : The Case of Vietnam

This paper considers the debate regarding ownership, competition and alternative approaches to SOE reforms. While the conventional approach has been, supported by empirical work, that privatization is only the most extreme of series proposals for the reforms, empirical evidence in Vietnam is an example to the contrary when it has advocated to reforms in market institutions and management rather than a radical ownership change. We argue that market-supporting institutions matter to a higher productive and profitable performance of the state enterprises. Enforcement to enhance ownership management has a positive contribution to productive performance of SOEs. Along with the focal relationship, we control the impact of market competition, local initial conditions, firm size and discuss some implementations of the analysis